UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 29, 2005 LanVision Systems, Inc. ---------------------- (Exact name of registrant as specified in its charter) Delaware 0-28132 31-1455414 - ---------------------------- ----------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10200 Alliance Road, Suite 200, Cincinnati, OH 45242-4716 - ----------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (513) 794-7100 -------------- 5481 Creek Road, Cincinnati, OH 45242-4001 ------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On March 29, 2005, LanVision Systems, Inc. ("LanVision") issued the press release attached hereto as Exhibit 99.1, which press release contains financial information about LanVision's fourth fiscal quarter and fiscal year ended January 31, 2005. The information hereunder shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits (c) Exhibits EXHIBIT NUMBER DESCRIPTION 99.1 News Release of LanVision Systems, Inc. dated March 29, 2005 Fourth Quarter and Fiscal Year Earnings news Release SIGNATURES Pursuant to the requirements of the Securities Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LanVision Systems, Inc. Date: March 30, 2005 By: /s/ Paul W. Bridge, Jr. ----------------------- Paul W. Bridge, Jr. Chief Financial Officer INDEX TO EXHIBITS Exhibit No. Description of Exhibit 99.1 News Release of LanVision Systems, Inc. Dated March 29, 2005 Fourth Quarter and Fiscal Year Earnings News Release 2
Exhibit 99.1 LANVISION SYSTEMS, INC. News Release of LanVision Systems, Inc. Dated March 29, 2005 NEWS RELEASE LanVision Systems, Inc. Visit our web site at: www.lanvision.com ----------------- COMPANY CONTACT: PAUL W. BRIDGE, JR. Chief Financial Officer (513) 794-7100 FOR IMMEDIATE RELEASE LANVISION SYSTEMS, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR 2004 RESULTS ACHIEVES RECORD QUARTERLY REVENUES, OPERATING PROFIT AND NET EARNINGS Cincinnati, Ohio, March 29, 2005 --- LanVision Systems, Inc. (Nasdaq: LANV) d/b/a Streamline Health today announced the financial results for the fourth quarter and fiscal year ended January 31, 2005. Revenues in the fourth quarter of fiscal year 2004 were a record $5.0 million compared with $3.6 million in the fourth quarter of fiscal year 2003, an increase of 41%. Operating profits for the fourth quarter were a record $1.2 million compared with $970 thousand in the fourth quarter of fiscal year 2003. Net earnings for the quarter were a record $1.6 million or $0.18 per share, compared with $1 million or $0.11 per share in the fourth quarter of fiscal year 2003. For the 2004 fiscal year ended January 31, 2005, revenues were $12.75 million compared with $12.80 million in fiscal year 2003. Operating profits for the fiscal year were $936 thousand compared with $2.4 million in fiscal year 2003. Net earnings for fiscal year 2004 were $558 thousand or $0.06 per share compared with $1.0 million or $0.11 per share in fiscal year 2003. J. Brian Patsy, President and Chief Executive Officer, stated, "The first three quarters of 2004 were challenging and below management's expectations. However, we anticipated and achieved a strong fourth quarter and the prospects for 2005 are very encouraging. Our major 3
reselling partner sold one new system in 2004 compared with four in 2003 and two in 2002, which was well below management's expectations, resulting in a $1.9 million decline in 2004 software revenues. Notwithstanding the decrease in the number of new 2004 systems sales, the pipeline of opportunities for 2005 and beyond has increased substantially as we expand our sales infrastructure, and we anticipate returning to pre-fiscal year 2004 system sales levels. We achieved the following milestones in fiscal 2004: o Achieved a 34% increase in our highly profitable ASPeNSM application hosting services revenues, o Achieved an 8% increase in services maintenance and support revenues, o Achieved operating profitability for the fifth consecutive year, o Produced a positive cash flow that allowed us to retire our high interest rate debt in fiscal 2004, and secure new debt financing at a very favorable rate, in addition to making $1.5 million in payments on our new debt during the last half of the fiscal year, o Executed re-marketing and referral relationships with new strategic business partners, including the recently announced Medical Coding Services, Inc., and o Introduced several new workflow solutions, re-branded our solutions and announced our new marketing name, `Streamline Health', to focus our product line and sales efforts on the lucrative workflow process reengineering opportunities in the healthcare market place, while maintaining our leadership role in providing comprehensive document management solutions." Mr. Patsy continued, "Our record fourth quarter revenues primarily resulted form a significant new software sublicense through our remarketing partner, additional software licenses to our existing customers, and a large storage area network hardware upgrade at one of our existing customers. Total fourth quarter revenues also included a 20% increase in services, maintenance and support and an 18% increase in our application hosting revenues. Our costs, with the exception of the cost of system sales which includes the cost of the hardware sale, increased modestly when compared to the prior comparable quarter. The selling, general and administrative expenses in 2004 increased because of increased sales and marketing staff as the company expands to respond to increased inquiries and sales opportunities, additional expenses for tradeshows, marketing collateral and marketing costs associated with the re-branding of the company as `Streamline Health' in order to focus on new market opportunities involving business process improvement via workflow automation technologies." Paul W. Bridge, Jr., LanVision's Chief Financial Officer, said, "Operating profits for fiscal year 2004 are not comparable to 2003 in that 2003 was favorable impacted by the reimbursement of approximately $520 thousand of prior year's legal fees upon settlement of 4
the LanVision proprietary technology claims. It should however, be noted that during 2004 the operating margins for our highly profitable services, maintenance and support and application hosting lines of business increased to 61% and 64%, respectively, from 59% and 54%, respectively in 2003. As new clients are signed, these margins are anticipated to increase as incremental costs for new clients are not significant. Also, LanVision recorded a tax benefit of $420 thousand in 2004 and $558 thousand in 2003 as a result of a reduction in the valuation allowance, based on future earnings projections before income taxes, on the deferred tax assets relating primarily to the approximately $29 million tax loss carry forward." Mr. Bridge concluded, "Our 2005 operating plan is predicated on investing in additional product development and sales and marketing staffs to enhance the current product line and provide the resources necessary to achieve significant revenue growth in the years ahead. Our goal for 2005 is a minimum 25% growth in revenues, which if achieved, should produce an operating profit of approximately $1 million after the investment in the additional staff necessary to increase and sustain significant year-to-year revenue growth in future years." Mr. Patsy continued, "Our strategic focus for 2005 will be to make the necessary investments in personal and infrastructure to execute our growth strategy. We will continue to make sound business decisions to significantly expand our workflow solutions set, strengthen our existing product line, enhance and expand our distribution capabilities through our current and new remarketing partners and to enlarge our direct sales and marketing staff to enable us to apply additional resources to revenue opportunities. During the last several years our high interest rate debt service obligations constrained our ability to hire the resources necessary to achieve significant revenue growth. One of our major goals for 2005 and beyond is to make the necessary investments to accelerate revenue growth." Mr. Patsy concluded, "Our comprehensive workflow and document management technologies and services provide solutions that address and improve inefficient business processes via workflow automation technologies. The Company is prepared for significant expansion into new markets for workflow and document management solutions that address the business process improvement initiatives throughout the hospital enterprise, including Health Information Management, Patient Financial Services, Supply Chain Management and Human Resources. We are very excited about our workflow and document management solutions that `make information flow' seamlessly throughout healthcare organizations thereby improving operating efficiencies. Our business solutions offer healthcare organizations the tools they need to provide improved productivity, reduced administrative costs, and enhanced patient care." CONFERENCE CALL INFORMATION The fourth quarter and fiscal year end conference presentation and call will be held at 10:00 a.m. Eastern Time, on Wednesday March 30, 2005. The call will feature remarks from J. Brian Patsy, President and Chief Executive Officer, William A. Geers, Chief Operating Officer, and Paul W. Bridge, Jr., Chief Financial Officer. 5
To listen to the call please go to www.streamlinehealth.net or www.lanvision.com approximately twenty minutes before the conference call is scheduled to begin. You will need to register as well as download and install any necessary audio software. The webcast will be available on the LanVision website for 30 days. ABOUT LANVISION SYSTEMS, INC. LanVision is a leading supplier of workflow and document management tools, applications and services that assist strategic business partners, healthcare organizations, and customers to create and improve operational efficiencies through business process re-engineering and automating demanding document-intensive environments. The company's workflow-based services offer solutions to inefficient and labor-intensive healthcare business processes within the revenue cycle, such as remote coding, abstracting and chart completion, remote physician order processing, pre-admission registration scanning, insurance verification, secondary billing services, explanation of benefits processing and release of information processing. The solutions also address the workflow needs of the Human Resource and Supply Chain Management departments of the healthcare enterprise. All solutions are available for purchase or through a remote hosting services model that better matches customers' capital or operating budget needs. The company's solutions create an integrated repository of historical health information that is complementary and can be seamlessly used with existing clinical, financial and administrative information systems, providing convenient electronic access to all forms of patient information from any location, including access using a web-browser through the Intranet/Internet. These integrated systems allow providers and administrators to dramatically improve the availability of patient information while decreasing direct costs associated with document retrieval, work-in-process, chart completion, document retention, and archiving. The company provides remote hosting services to various healthcare providers including University Hospital, a member of The Health Alliance of Greater Cincinnati, and Children's Medical Center of Columbus, OH. In addition, the Company has installed its workflow and document imaging solutions at leading healthcare providers including Stanford Hospital and Clinics, Albert Einstein Healthcare Network, Beth Israel Medical Centers, University of Pittsburgh Medical Center, Medical University Hospital Authority of South Carolina, and Memorial Sloan-Kettering Cancer Center. For additional information please visit our website at http://www.streamlinehealth.net. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Statements made by LanVision that are not historical facts are forward-looking statements that are subject to risks and uncertainties. The forward-looking statements contained herein are SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS, INCLUDED HEREIN. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE 6
IMPACT OF COMPETITIVE PRODUCTS AND PRICING, PRODUCT DEMAND AND MARKET ACCEPTANCE, NEW PRODUCT DEVELOPMENT, KEY STRATEGIC ALLIANCES WITH VENDORS THAT RESELL LANVISION PRODUCTS, THE ABILITY OF THE COMPANY TO CONTROL COSTS, AVAILABILITY OF PRODUCTS PRODUCED FROM THIRD PARTY VENDORS, THE HEALTHCARE REGULATORY ENVIRONMENT, HEALTHCARE INFORMATION SYSTEMS BUDGETS, AVAILABILITY OF HEALTHCARE INFORMATION SYSTEMS TRAINED PERSONNEL FOR IMPLEMENTATION OF NEW SYSTEMS, AS WELL AS MAINTENANCE OF LEGACY SYSTEMS, FLUCTUATIONS IN OPERATING RESULTS AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE LANVISION SYSTEMS, INC. FILINGS WITH THE U. S. SECURITIES AND EXCHANGE COMMISSION. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH REFLECT MANAGEMENT'S ANALYSIS ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISION TO THESE FORWARD-LOOKING STATEMENTS, WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. (C)2005 LanVision Systems, Inc., Cincinnati, OH 45242. 7
LANVISION SYSTEMS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED FISCAL YEAR ENDED JANUARY 31, JANUARY 31, ------------------------------- ------------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ REVENUES: Systems sales $ 2,447,525 $ 1,394,700 $ 2,965,262 $ 4,208,755 Services, maintenance and support 1,888,671 1,580,862 7,186,304 6,651,953 Application-hosting services 676,350 574,746 2,599,092 1,942,826 ------------ ------------ ------------ ------------ Total revenues 5,012,546 3,550,308 12,750,658 12,803,534 OPERATING EXPENSES: Cost of systems sales 1,514,001 411,482 2,331,176 1,584,955 Cost of services, maintenance and support 737,173 672,875 2,804,202 2,752,500 Cost of application-hosting services 248,864 230,228 916,737 900,287 Selling, general and administrative 822,680 765,870 3,701,443 3,158,239 Product research and development 509,687 499,872 2,061,207 2,053,901 ------------ ------------ ------------ ------------ Total operating expenses 3,832,405 2,580,327 11,814,765 10,449,882 ------------ ------------ ------------ ------------ OPERATING PROFIT 1,180,141 969,981 935,893 2,353,652 Other income (expense): Interest income 14,218 14,241 70,344 61,443 Interest expense (52,644) (461,513) (904,314) (1,852,926) ------------ ------------ ------------ ------------ Earnings before income taxes 1,141,715 522,709 101,923 562,169 Income tax benefit (provision) 455,753 476,997 455,753 456,997 ------------ ------------ ------------ ------------ NET EARNINGS $ 1,597,468 $ 999,706 $ 557,676 $ 1,019,166 ============ ============ ============ ============ Basic net earnings per common share $ 0.18 $ 0.11 $ 0.06 $ 0.11 ============ ============ ============ ============ Diluted net earnings per common share $ 0.17 $ 0.11 $ 0.06 $ 0.11 ============ ============ ============ ============ Number of shares used in per common share computations - basic net earnings 9,084,477 9,018,784 9,067,816 8,996,734 ============ ============ ============ ============ Number of shares used in per common share computations - diluted net earnings 9,291,812 9,253,985 9,233,320 9,207,241 ============ ============ ============ ============ 8
LANVISION SYSTEMS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS JANUARY 31, ----------------------------------- ASSETS 2005 2004 ------------ ------------ Current assets: Cash and cash equivalents $ 4,181,073 $ 6,227,236 Accounts receivable, net of allowance for doubtful accounts of $200,000 and $400,000, respectively 1,901,846 2,386,723 Contract receivables 1,404,364 2,972,356 Other 686,116 357,921 ------------ ------------ Total current assets 8,173,399 11,944,236 Property and equipment: Computer equipment 1,501,796 2,588,749 Computer software 832,304 812,591 Office furniture, fixtures and equipment 537,137 1,166,377 Leasehold improvements 37,504 157,492 ------------ ------------ 2,908,741 4,725,209 Accumulated depreciation and amortization (1,996,129) (3,672,442) ------------ ------------ 912,612 1,052,767 Capitalized software development costs, net of accumulated amortization of $3,233,228 and $2,600,228, respectively 2,056,701 1,689,701 Other 850,523 603,750 ------------ ------------ $ 11,993,235 $ 15,290,454 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 886,090 $ 637,222 Accrued compensation 276,292 265,095 Accrued other expenses 719,135 928,097 Deferred revenues 2,231,442 2,357,531 Current portion of capitalized leases 168,121 220,199 Current portion of long-term debt -- 1,000,000 Accrued interest on long-term debt -- 4,635,169 ------------ ------------ Total current liabilities 4,281,080 10,043,313 Capitalized leases -- 168,121 Long-term debt 2,000,000 -- Stockholders' equity: Convertible redeemable preferred stock, $0.01 par value per share, 5,000,000 shares authorized, no shares issued -- -- Common stock, $0.01 par value per share, 25,000,000 shares authorized, 9,084,535 and 9,030,032 shares issued, respectively 90,845 90,300 Capital in excess of par value 35,002,961 34,928,047 Accumulated (deficit) (29,381,651) (29,939,327) ------------ ------------ Total stockholders' equity 5,712,155 5,079,020 ------------ ------------ $ 11,993,235 $ 15,290,454 ============ ============ 9